REIT sectors

Written by
András I.
Fact checked by
Gyula L.
Updated
Oct 2021

As discussed in our article "What is a REIT?", REITs invest in a variety of real estate property types from apartment buildings to data centers. While most REITs focus on a particular property type, some have multiple types of real estate in their portfolios.

The traditional property sectors for REITs are as follows:

  1. Office REITs: Office properties have single or multiple tenants and can range from Class A to C based on location and other quality factors. Highly desired locations reduce vacancy risk. On the other hand, office properties often require high capital expenditures to keep them new.
  2. Industrial REITs: Think of warehouses or distribution centers. The rise of e-commerce made this type of real estate very sought-after. Their capital expenditure needs are low.
  3. Retail REITs: These focus on large regional malls, outlet centers, or grocery-anchored shopping centers. The rise of e-commerce has haunted this sector for years, but there are some resilient brick-and-mortar retailers that enjoy continued success.
  4. Residential REITs: Include among others REITs that specialize in apartment buildings, student housing and single-family homes. Most of the time, residential REITs focus on specific geographical markets or classes of properties.
  5. Lodging/Resort/Hotel REITs: Propoerties targeting tourism, from business travelers to vacationers. These had some of the highest volatility in cash flows in the REIT space, even before the Covid pandemic.

Some other specialty REIT sectors include: 

  • Net lease
  • Billboard
  • Data centers
  • Farmland
  • Ground lease
  • Hospital
  • Infrastructure
  • Prison
  • Self-storage
  • Skilled nursing
  • Timberland

Want to learn more?

Hope you liked this quick rundown about the different real estate investment trusts by property type. If you'd like to go deeper, continue by reasding one of the articles below:

What is a REIT?

How to invest in REITs

 

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Author of this article

András Iván
András Iván

András is a former broker analyst for BrokerChooser. He has years of experience in investing and trading equities, options and bonds. He believes that active trading and a more passive investing approach both have merits and everyone can find a strategy that fits their needs. He's eager to help identify the characteristics of specific brokers, so each client can find the best match.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

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